ST. LOUIS -- Emerson (NYSE: EMR - News) announced today that it has reached an agreement to acquire the outside plant and power systems business of Marconi Corporation PLC (LSE: MONI - News) for $375 million in cash. The transaction is expected to close by the end of Emerson's fourth fiscal quarter, September 30, 2004, following regulatory review, and is expected to be accretive to fiscal 2005 earnings.

The Marconi power business, based in Lorain, Ohio, is a leading provider of DC power products, engineering and installation services, and outside plant products to major telecommunication carriers throughout North America. Its revenues for the year ended March 31, 2004, were approximately $380 million. This acquisition will allow Emerson to strengthen its presence with the regional Bell companies, inter-exchange carriers, wireless and cable companies in North America -- and leverage its global assets.

"The combination of Marconi's power business with the global engineering and manufacturing resources of Emerson Network Power provides an unmatched competitive advantage for global telecom customers," said David N. Farr, Emerson chief executive officer. "This expands our North American presence in DC products, solutions, and services, and enhances our position as a global leader in DC power systems."

"The Marconi power business complements our existing global business and offers significant revenue, cost, and technology synergies," added Jim Berges, President of Emerson. "With a global product platform strategy and strong regional configuration capabilities, Emerson can provide leading edge solutions for our customers anywhere. Marconi's outside plant products, used to support the growing demand for more power and electronics placed outside the central office and closer to the subscriber, expand the product portfolio available to Emerson's customers."

In a separate release:

London -- Marconi Corporation plc (London: MONI and Nasdaq: MRCIY) today announces the signing of a definitive agreement for the sale of its Outside Plant & Power ("OPP") business to Emerson (NYSE: EMR) for a total consideration of approximately US$406 million (approximately £221 million), of which US$375 million will be paid in cash with the balance relating to net pension and retirement benefit liabilities assumed by Emerson. The transaction is subject to regulatory review and other customary closing conditions. Completion is expected before the end of September 2004.

Upon completion, and pursuant to the terms of Marconi's 8% Guaranteed Senior Secured Notes due 2008 (Senior Notes), the total gross cash proceeds will be transferred to Marconi's Mandatory Redemption Escrow Account (MREA) and will be used to fund a further mandatory redemption of the Group's Senior Notes. Following this redemption the Group's Senior Notes outstanding will be reduced to approximately US$104 million. The Board confirmed its strategy to continue to pay down the remaining Senior Notes.

Emerson and its affiliates will assume all obligations under pension and retirement benefit plans with respect to current and former OPP employees. The net liability associated with these plans was approximately $31 million pre-tax as reported in Marconi's Group balance sheet as of 31 March 2004.

The OPP business recorded sales of approximately £209 million and an operating profit, before goodwill amortisation and exceptional items, of approximately £14 million, in the year ended 31 March 2004. Net assets at 31 March 2004 were £48m before pension liability and goodwill. Of the £436 million of goodwill on Marconi's balance sheet at 31 March 2004, £46 million related to the OPP business. Marconi will record a profit on disposal of this business and will disclose further information on this following completion.

Commenting on the transaction, Mike Parton, Chief Executive of Marconi Corporation plc, said: "The Outside Plant & Power business is the last of the businesses we identified as not being core to Marconi's ongoing business. We are delighted with this transaction, the cash proceeds from which will enable us to continue to reduce group debt and the associated interest payments. The management of OPP have delivered excellent performance improvements over the last year and the purchase price reflects both that and the loyal customer base that the business has built."

Marconi Corp. plc